2 wire transmitter, Transducer is powered by the same 2 wires that carry the 4–20 mA signal.
4 wire transmitter, the Transducer is powered by a pair of wires (24 VDC typically) and the 4–20 mA signal goes in another pair of wire.
The two wires are commonly used because we can save money in cable as the copper wires are more expensive.
If the device consumes more power than 4–20 mA, then you have to go to the 4 wire transmitter option.(like Magnetic Flow meters)
Credits - Amit Upadhyay